Over the past five years, the Securities and Exchange Commission (“SEC”) has repeatedly exerted its regulatory will on multi-level marketing companies. In Part One of this two part series, I explained the basic elements of a “security” and the trouble surrounding the presence of unregistered securities in the context of network marketing. In this article, I provide some concrete […]
While entrepreneurs and marketers alike are often aware of the FTC’s involvement in the direct sales space, clients largely remain unaware of the Security and Exchange Commission’s (“SEC”) involvement in network marketing. The SEC oversees the enforcement of federal securities laws. This means the SEC is designed to ensure companies do not offer or sell securities in the absence […]
Edith Ramirez, chairwoman of the Federal Trade Commission, gave a powerful speech at the DSA’s Business and Policy Conference in Washington on October 25th. While some in attendance were expecting a non-substantive speech, the kind one would expect from a high-ranking government official, Ramirez was anything but boring. She gracefully navigated some very controversial terrain […]
I recently fielded a phone call from a business owner who asked me the following question: Does my business model qualify as a multi-level marketing company? It’s a good question whose answer invokes a variety of possible legal implications. THE MLM LEXICON With no single authority providing some sort of precedential definition of “MLM,” the best way of […]
Talk Fusion, a member of the DSA and a purported legitimate multilevel marketing company, was recently named in a class action lawsuit. The lawsuit can be found here and in its entirety below. The lawsuit was filed by Spreter Law Firm, based out of San Diego, California. It’s a meaty lawsuit, clocking in at 110 […]
The state of MLM law is in a bit of a mess due to the conflicting agendas of both critics and proponents. Post-Ackman, there’s a thermo-nuclear war being waged over two key issues: internal consumption and retail sales. This war has led to a deluge of content from both sides claiming to have the moral […]
